A Giant Recovers, and StrengthensWed, 02/21/2018 - 17:31
What does not kill you makes you stronger, goes the old saying. Akira Matsuzawa, President and General Director of Toshiba de México, believes that, like that adage, a time of crisis can produce positive results. That is what happened to the Japanese titan and Matsuzawa says the company is better for it as it is now focusing on what it does best. “It is no secret that Toshiba went through a crisis that started in 2015,” he says. “Now, we are developing spin-offs and selling business units to recover the huge loss triggered by the nuclear business and to enhance our financial health.”
Matsuzawa says that although the undertaking has not been easy, by focusing on Toshiba’s highest added-value the company is not only able to offer better solutions to its clients but also a strong brand. “The Toshiba name still represents safety and reliability in the market, and main banks and other financial institutions continue to back us, as do the clients that trust our technology.”
Unlike many companies that employ a discontinuous strategy for technological products, Toshiba prefers to follow a more traditional approach to its technology that ensures the company’s clients can get the most out of the products they receive, particularly in the energy area. “The philosophy of Toshiba’s energy division is based on offering continuous improvements for each one of its turbine generators,” Matsuzawa says. “This has allowed us to reach even higher temperatures, which directly equates to more production capacity and more efficiency.” He says that by following the continuous improvement method, Toshiba achieved 63 percent efficiency at one of the combined cycle systems installed in Nishi Nagoya, Japan.
An approach based on brand trust and tangible results can offer a strong foothold in Mexico’s energy market, says Marcial Frigolet, Vice President of Toshiba de México. Toshiba is looking to capitalize on the opportunities opened by the Energy Reform as renewable energies are intermittent and the country is going to need a secure baseload to support their integration into the energy mix. “The Mexican government has placed a strong bet on the implementation of natural gas plants that include combined cycles and efficient cogeneration. We are working to make sure that most of the steam turbines to be used at these plants are provided by Toshiba.”
As the reform moves forward, CFE will play a critical role in securing Mexico’s energy transition due to the fact the commission owns the vast majority of generation plants using natural gas in the country. This leaves CFE in a tight position, because the energy company is also struggling with a low budget and debts, explains Frigolet. “CFE has plants that are old and that must compete on an energy-price basis against new and more efficient plants that will be installed by new generators in the market. It is going to be hard for CFE to adapt to this change.” It does not help that the best option for CFE is to install new units with higher efficiencies, Frigolet continues. “The only way the company can solve this issue is through Public Private Associations (PPAs) to help it finish the projects it has in its portfolio.”
To win contracts in Mexico, Toshiba is relying on its capabilities and advantages. “Our turbines are the most optimized in the world. They offer the best performance and a clear competitive advantage on ROI,” Frigolet says. He also points to the long-term vision Toshiba develops with its clients. “Another competitive advantage we have is our long-term maintenance contracts. Our strategy is based on always offering the best post-sale, long-term service we can provide.”
Toshiba is also looking at other business prospects in Mexico. Geothermal represents an important opportunity for the company, which already has experience in the segment. “We are the No. 1 provider of geothermal turbines in Mexico and the world. In Mexico, we have the largest installed capacity, with over 400MW just in Cerro Prieto, the biggest plant CFE has for geothermal production,” Frigolet says.
The company also is keeping an eye on the electricity auctions as an opportunity to solidify its position in the value chain. “We are not among the companies looking directly at the electricity auctions. Instead, we support generators. We are interested in both the long-term and midterm electricity auctions,” says Matsuzawa.